Trader's Sex/Hormones Claims Being Investigated
The federal Equal Employment Opportunity Commission is ramping up its inquiry into sexual harassment accusations made by a former junior trader at SAC Capital, who says his boss, star trader Ping Jiang, forced him to take female hormones and then sexually assaulted him, CNBC has learned.
The case, brought by former SAC trader Andrew Tong against Jiang and SAC, is drawing a lot of attention on Wall Street, both for the sensational accusations being made and for the high profile of the players involved.
Both SAC and Jiang vigorously deny the claims. But the EEOC is considering whether to join Tong's sexual harassment lawsuit, and in recent weeks has been increasing its scrutiny of his charges, people close to the matter say.
EEOC investigators have recently taken the unusual step of doing an "on site" interview of Jiang at SAC's New York City headquarters where he works. Such interviews rarely take place at company locations, say people with knowledge of the EEOC's activities.
Not only did the EEOC interview Jiang, but it also interviewed most if not all members of Jiang's trading staff, people with knowledge of the matter say. The EEOC is expected to make a ruling on the case -- whether to join to suit or not -- in the coming weeks.
SAC's troubles may not end with Tong's allegations, however. The US Attorney for the Eastern District of New York has interviewed Tong about trading activities at SAC Capital, one of the world's most powerful hedge funds run by superstar trader Stephen Cohen, according to people familiar with the matter.
SAC has been the target of private litigation claiming that the firm has sold stocks short (betting they will decline in price) after getting tipped off to negative analysts reports about certain companies. SAC has denied the accusations.
Meanwhile, one person with knowledge of the EEOC's activities says the commission might expand its inquiry of Tong's charges of sexual harassment after reading a quote in the New York Post, citing an SAC employee who said: "If taking female hormones actually helped you do your job, they would simply hire women here...But they don't. They don't think women are aggressive enough."
An SAC spokesman declined to comment on the EEOC's increased interest in Tong's allegations other than to say: "SAC conducted a thorough investigation and found these scurrilous accusations to be false. We will vigorously defend ourselves and are confident that these claims will be swiftly rejected in arbitration."
Tong's attorney, Gerry Filippatos, said in a statement that "all the facts stated by Andrew Tong in his verified complaint are absolutely true" and that they "are corroborated, in part, by scientific evidence that supports the occurrence of traumatic events that form the basis of his lawsuit."
Filippatos wouldn't comment about the specifics of the case. Tong's allegations, first reported by CNBC last week, are contained in a lawsuit sealed by a New York State Supreme Court judge.
In the lawsuit,Tong alleges that he was forced to take female hormones by Jiang who said they would make him less aggressive and a better trader. Tong said in the lawsuit that he was sexually assaulted by Jiang and that he was forced to wear women's clothing and couldn't have sex with his wife, who was trying to get pregnant.
The sexual harassment allegation made by Tong involves a sexual assault where Tong claims to have been tied up by Jiang, according to people with knowledge of the matter.